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Showing 121 to 140 of 467 Records
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2025 (1) TMI 347
Justification for levying penalty - suppression of facts or not - Whether the demand of/imposition of penalty is correct, especially when admittedly, the payments of tax and interest stand discharged before the issuance of SCN? - HELD THAT:- Section 73(3) casts a serious responsibility on the officer who is issuing or proposing to issue SCN, to arrive at or decide or ascertain that the assessee has remitted the tax along with applicable interest. The allegation regarding suppression should not only be based on the non-filing of returns, but with an intention to evade tax.
Here, in the case on hand, the assessee has pleaded that it could not file the ST-3 returns in time because it had no money or, rather they were under financial constraints due to which, they could also not remit the tax and therefore, they could not fill up the requirements of online filing of the returns, which, according to them was a bona fide reason for on filing of their ST3 returns and pay the tax in time. But, however, the fact remains that even before the issuance of SCN, they had remitted the entire tax demand along with interest - there was a plausible explanation on record, by the appellant, which was not found to be incorrect or that there was any other intention unearthed by the Revenue to disbelieve the said explanation. They only reason adopted in the impugned order is Section 73(4) ibid, which carves out an exception to Section 73(3) ibid. In the SCN, though suppression has been alleged, but however, the same is not connected with ‘intent’ to evade tax, since admittedly, the appellant itself has admitted the non-payment for the reasons of its financial constraints, which is not denied by the revenue.
Conclusion - SCN is issued only to impose penalty by invoking the larger period of limitation. This is clearly forbidden under Section 73(3) ibid and the case on hand therefore not covered under Section 73(4) ibid. The Commissioner has therefore erred in passing an unsustainable order which deserves to be set aside.
Appeal allowed.
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2025 (1) TMI 346
Failure to obtain service tax registration and failure to deposit due service tax liability thereon in government exchequer - manpower recruitment or supply agency - site formation and clearance excavation and earthmoving and demolition services - Extended perod of limitation.
Non-payment of service tax - HELD THAT:- It is found that the show cause notice dated 01.10.2014 was issued by the department for evasion of service tax on the allegation that the appellant has rendered taxable services under the category of ‘manpower recruitment or supply agency’ and ‘site formation and clearance excavation and earthmoving and demolition’ services and did not obtain service tax registration and also did not deposit the service tax liability in government exchequer - in this case, the services were provided to M/s NTPC which is a governmental authority and were exempted from levy of service tax. M/s NTPC is a public sector undertaking under the ownership of the Ministry of Power and is under control of the Government of India and is engaged in generation of electricity.
Hon’ble Apex Court in the case of COMMISSIONER, CUSTOMS CENTRAL EXCISE AND SERVICE TAX, PATNA VERSUS M/S SHAPOORJI PALLONJI AND COMPANY PVT. LTD. & ORS. AND UNION OF INDIA & ORS. VERSUS M/S SHAPOORJI PALLONJI AND COMPANY PVT. LTD. [2023 (10) TMI 748 - SUPREME COURT] has considered the scope of definition of ‘Governmental Authority’ and as per the settled position of law, a ‘Governmental Authority’ means “an authority or a board or any other body: (i) set up by an Act of Parliament or a State Legislature; or (ii) established by government with 90% or more participation by way of equity or control to carry out any function entrusted to a municipality under Article 243W of the Constitution”.
Extended period of limitation - HELD THAT:- The invocation of extended period in the present case is also not warranted because the appellant had a bona fide belief that no service tax was attracted on the value of services rendered by them to turnkey projects being a minor sub-contractor in projects declared by Government of India as Mega Development Project of National Importance. The appellant even did not get itself registered due to the said bona fide belief and also did not recover any service tax from the main contractor M/s ITD or from M/s NTPC; and there was no intention to evade payment of service tax on the part of the appellant.
Conclusion - Services provided as part of a 'Work Contract' related to dam construction are exempt. The services to a 'governmental authority' are exempt. The invocation of extended period in the present case is also not warranted because the appellant had a bona fide belief that no service tax was attracted.
Appeal allowed.
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2025 (1) TMI 345
Classification of service - services provided by the Appellant to Canpotex - Business Auxiliary Services (BAS) or fall under Business Support Services (BSS) and Business Promotion Services (BPS)? - place of provision of services - services are used in India in the hands of the Indian farmers - export of services or not - non-application of mind and uncertainty in the mind of the Adjudicating Authority - violation of principles of natural justice - HELD THAT:- Reliance is placed on the decision of the Tribunal in Paul Merchants Limited vs. Commissioner, [2012 (12) TMI 424 - CESTAT, DELHI (LB)], wherein it was held that the person, who is obliged to make payment for the service and whose need is satisfied by the provision of the service, is the recipient of service. On this ground, the Tribunal held that where the person located abroad is under an obligation to pay for the service and thus pays for it, the service is used outside India. The Tribunal has further held that when the person on whose instructions the services in question have been provided is located abroad, the destination of the service has to be treated abroad. The destination has to be decided on the basis of the place of consumption and not the place of performance. The place of provision of such services is outside the taxable territory and thus, these are not taxable for the period from July, 2012.
In the instant case, considering the nature of services, it is found that the place of provision has to be determined under the general rule, i.e. Rule 3. Under Rule 3 of the POPS Rules, the place of provision of service will be Canada, i.e. location of Canpotex. As the place of provision of these services is outside the taxable territory, the same are not chargeable to Service Tax under Section 66B. In the impugned order the place of provision has been determined under Rule 4(b) of the POPS rules. It is evident from the agreement as well as the impugned order that service was not provided to an individual thus, such rule is not applicable. Further, no recipient of service was acting on behalf of the recipient in India as there was no contract between Canpotex and the farmers and Canpotex was also not present in India, therefore, Rule 4 (b) is not applicable to the facts of the case. Further, the recipient of service is the exporter and not the farmers thus, the presence of exporters determines that the service was performed outside India.
The price of goods sold by one party to another is governed by the mutual understanding thereof. The seller may offer discount to the buyer towards the purchase price which will result into reduction of such sale price. The discount can be given in any form. The form of giving the discount cannot modify the nature of such discount being a factor resulting reduction of the price agreed. In this regard reliance is placed on Union of India vs. Bombay Tyres International Private Limited, [1983 (11) TMI 70 - SUPREME COURT], wherein the Hon'ble Supreme Court laid down the principles for determining the deduction on account of discounts - On a perusal of the observations of the Hon'ble Supreme Court, it is clear that irrespective of the nomenclature used to describe discounts, so far as the discounts are established under the agreement or under terms of sale or by established practice and the nature of the discounts is known at or prior to the removal of the goods, they shall be admissible as deduction for arriving at the transaction value. Further, the Court has categorically held that the discounts shall be allowed even if they are not payable at the time of each invoice.
Conclusion - The said discount, being towards sale of goods, is not covered under any of the categories of services under Section 65(105) and not chargeable to Service Tax under Section 66 of the Act for the period till June, 2012. Similarly, such discount, being towards sale of goods, is excluded from the definition of 'service' under Section 65B(44) of the Act and thus not chargeable to Service Tax under Section 66B of the Act for the period from July 2012.
The confirmation of demand in the impugned order is not sustainable and deserves to be set aside - Appeal allowed.
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2025 (1) TMI 344
Justification in issuance of SCN - whether SCN was justified when the appellant had already discharged the service tax liability along with applicable interest before the issuance of the SCN? - levy of penalty - HELD THAT:- Once the discrepancies were pointed out by the audit team and accepted by the Appellant Assessee and service tax liability was discharged alongwith interest much before the issuance of the SCN, there was no occasion to issue a SCN, as has been consistently held by the Tribunal and the Superior Courts.
The Tribunal in the case of Gardenia India Ltd., [2018 (11) TMI 305 - CESTAT ALLAHABAD] observed 'there was no need for issue of show cause notice in respect of the demands confirmed in the Order-in-Original. We set aside the penalties imposed under section 77 and 78 of Finance Act, 1994 read with Rule 15 of Cenvat Credit Rules.'
Conclusion - In view of the payment of entire amount before issue of show cause notice there was no need for issue of show cause notice. Penalty also set aside.
Appeal allowed.
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2025 (1) TMI 343
Levy of service tax - Business Auxiliary Service - act of selling / supplying bought out goods (spares) by the appellant to the buyers, while selling drilling rigs and ancillary equipment produced - HELD THAT:- Reliance placed in the case of LMP PRECISION ENGINEERING CO P LTD VERSUS C.C.E & S.T. -VALSAD [2024 (5) TMI 777 - CESTAT AHMEDABAD], where it was held that 'A simple requisition by the customer of the spare parts as may be required by them and delivering the same by them was as per contractual requirement or warranty obligation by the appellant. It would not tend to bring the transaction within the ambit of ‘Business Auxiliary Service’.'
Conclusion - The act of selling / supplying bought out goods (spares) by the appellant to the buyers, while selling drilling rigs and ancillary equipment produced, does not come within the ambit of Business Auxiliary Service.
Appeal allowed.
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2025 (1) TMI 342
Levy of service tax - Real Estate Agent service - having sold the land which was intended to be purchased initially for a profit - HELD THAT:- The very same issue in the present appellant company’s case i.e. Rajni Builders Pvt Ltd. the issue in hand has been decided in RAJNI BUILDERS PVT LTD VERSUS C.C.E. & S.T. -VADODARA-I [2024 (8) TMI 1448 - CESTAT AHMEDABAD] whereby this tribunal held that 'in the identical nature of transaction, it was held that assessee cannot be charged with service tax under 'Real Estate Agent'.'
Conclusion - The appellant's activities were not taxable under the "Real Estate Agent" service category.
Appeal of Revenue dismissed.
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2025 (1) TMI 341
Condonation of gross delay of 3213 days in filing the appeals - no satisfactory explanation provided - HELD THAT:- There are no good reason to interfere with the impugned order dated 15-10-2015 passed by the Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench at Ahmedabad in Appeal Nos. E/640/2009-DB, E/1284-1285/2009-DB and E/557/2012-DB respectively.
The appeals are, therefore, dismissed on the ground of delay as well as on merits.
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2025 (1) TMI 340
Exemption from Duty - Wrongful availment of N/N. 12/2012-CE dated 17.03.2012 - food preparation supplied to Women Industrial Co-Operative Societies intended for free distribution to the economically weaker sections of the society - it was held by CESTAT that 'The demand of Central Excise duty along with interest and penalty confirmed in the impugned order is set aside.'
HELD THAT:- There is no merit in these appeals and the same are accordingly dismissed.
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2025 (1) TMI 339
Interest on delayed refund - scope and ambit of Section 11 B and 11 BB of the Central Excise Act, 1944 and Section 35 F and 35 FF of the Central Excise Act, 1944 - Violation of principles of natural justice - failure to consider relevant facts - It is submitted that the impugned judgment does not take notice of the relevant facts, including the 6 years’ delay on the part of the respondent which has been condoned, as well as the statutory provisions, in terms of Section 11BB of the Central Excise Act, 1944
HELD THAT:- Issue notice, returnable in the week commencing 24.03.2025.
Stay of the operation of the impugned judgment till the next date of hearing granted in favor revenue
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2025 (1) TMI 338
Cenvat Credit in respect of the rejected finished goods received back from the buyer - invocation of extended period of limitation - Suppression of facts or not - HELD THAT:- Though the appellant has recorded the factum of return of the defective goods in their RG 23A Part-I alongwith the relevant invoices and subsequent issuance of the production area for manufacture of finished products but has not been able to establish that the same were cleared on payment of duty. Further, the appellant has also not strictly followed the procedure as prescribed in Rule 16 of Central Excise Rules, 2002. In the absence of clear proof of payment of duty after re-processing of defective goods, it will be difficult for me to give a concrete finding on the said issue; but as far as extended period of limitation is concerned, the appellant has shown the defective goods returned in RG 23A Part-I and has been regularly filing monthly returns before the department and the department has not raised any objection and only during the course of audit conducted by AG Audit (H.P.) during 06.09.2003 to 29.10.2003 it has been pointed out that the appellant has wrongly taken the Cenvat Credit; and thereafter the show cause notice was issued purely on the basis of audit objection which is unsustainable.
The appellant has been regularly filing monthly ER-1 returns for the period in dispute declaring the Cenvat Credit admissible to them and therefore, the appellant cannot be accused of suppression of relevant facts when there are series of instructions issued by the CBIC board directing the field officers to scrutinize the ER-1 returns carefully.
When the audit was conducted in year 2003, the entire information was within the knowledge of the department from the date of conclusion of the audit, but in spite of that, the show cause notice was issued after a gap of three years without any further investigation conducted by the department from the date of conclusion of audit. It has been consistently held by various Courts that when the relevant facts are within the knowledge of the department, the extended period for raising the demand cannot be applied.
Conclusion - The show-cause notice was issued purely on the basis of audit objections without the necessary investigation which must precede action under Section 11A of the Act. The demands based solely on audit objections without further investigation are unsustainable and that extended periods cannot be applied when facts are known to the department.
The appeal of the appellant allowed on limitation alone by setting aside the impugned order.
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2025 (1) TMI 337
Refund of central excise duty under Section 11B of the Central Excise Act, 1944 - Self Assessment - Claim on the ground that excess payment of such duty made due to wrong valuation of goods - rejection on the ground that appellant have failed to justify that the burden of central excise duty paid by them and have not been passed on to the customers - principles of unjust enrichment - HELD THAT:- In the present case appellant have paid the duty of self assessment basis. Whether the issue with regards to applicability of Section 4A or Section 4 for making assessment of duty could not have been raised by the appellant in these proceedings of refund in terms of Section 11B of Central Excise Act, 1944 needs to be considered in the light of decision of Hon’ble Supreme Court in the case of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV [2019 (9) TMI 802 - SUPREME COURT (LB)]. Hon’ble Supreme Court has specifically held that 'The provisions under Section 27 cannot be invoked in the absence of amendment or modification having been made in the bill of entry on the basis of which self- assessment has been made. In other words, the order of self-assessment is required to be followed unless modified before the claim for refund is entertained under Section 27. The refund proceedings are in the nature of execution for refunding amount. It is not assessment or re- assessment proceedings at all. Apart from that, there are other conditions which are to be satisfied for claiming exemption, as provided in the exemption notification. Existence of those exigencies is also to be proved which cannot be adjudicated within the scope of provisions as to refund. While processing a refund application, re- assessment is not permitted nor conditions of exemption can be adjudicated.'
Nothing has been brought on record to show that the self assessment made by the appellant at the time of clearance of these goods was ever appealed against by the appellant before the Commissioner (Appeals) in terms of Section 35 of Central Excise Act, 1944 or the order of self assessment has been modified. In absence of such modification the submissions made by the appellant in these proceedings under Section 11B challenging the self assessment made for claiming this refund cannot be said to be proper. In view of the above referred decision of Hon’ble Supreme Court were in it has been specifically held that refund proceedings under Section 11B are executionary in nature.
Conclusion - The refund proceedings are in the nature of execution for refunding amount. It is not assessment or re-assessment proceedings at all. The appellant failed to prove entitlement to a refund under Section 11B.
There are no merits in this appeal - appeal dismissed.
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2025 (1) TMI 336
Central Excise Duty for the period prior to registration - inclusion of clearances made to industrial customers in the assessable value - HELD THAT:- The claim made by the appellant is substantiated with documentary evidence. The clearances made to industrial customers is also included while computing the duty demanded in the impugned order. Since MRP based assessment is not applicable to clearances made to industrial customers, the submission made by the Appellantagreed upon, that the value of clearances amounting to Rs.3,62,038/- needs to be reduced from the value of Rs.1,53,53,283/- worked out by the Department for demanding duty. If this amount is reduced, then the value of clearances made during the Financial Year 2014-15 prior to 31.01.2015 i.e., the date of taking registration, works out to Rs.1,49,91,245/- - There is no demand liability to be paid by the Appellant for the period prior to 31.01.2015. There is no dispute that the Appellant has adopted the MRP based assessment after taking registration with effect from 31.01.2015.
Since the demand itself is not sustainable, the question of demanding interest and imposing penalty does not arise.
Conclusion - MRP-based assessments are not applicable to industrial customer clearances, and demands based on incorrect assessments are unsustainable. No demand liability to be paid by the Appellant for the period prior to registration.
Appeal allowed.
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2025 (1) TMI 335
Disallowance of claims of branch transfers by CMS Computers under section 6A of the CST Act - inter-state sale or not - levy to tax under the CST Act with interest and penalty - HELD THAT:- It is seen that the Assessing Officer has not provided any specific finding and had given a general finding that there were pre-existing orders for movement of goods. Mere existences of pre-existing purchase orders, prior to movement of goods, does not automatically imply that the entire movement constitutes an inter-state sale, particularly when the goods are stock transferred in the regular course of business. CMS Computers had to maintain ample stock at the branch office to fulfill the orders placed by the different customers. The Assessing Officer was obliged to evaluate each transaction involving the transfer of goods before deciding whether to allow or disallow the branch transfer.
In this connection reference can be made to the judgment of the Supreme Court in Tata Engineering Locomotive [1970 (3) TMI 104 - SUPREME COURT], wherein it was held that 'It has been suggested that all the transactions were of similar nature and the appellant’s representative had himself submitted that a specimen transaction alone need be examined. In our judgment this was a wholly wrong procedure to follow and the Assistant Commissioner, on whom the duty lay of assessing the tax in accordance with law, was bound to examine each individual transaction and then decide whether it constituted an inter-state sale exigible to tax under the provisions of the Act.'
Conclusion - The State Tribunal had meticulously examined the decisions and the factual position and has, therefore, considered it appropriate to remand the matter to the Assessing Officer to verify the lorry receipts/dispatch proof in respect of each of the transactions. There is, therefore, no infirmity in order passed by the State Tribunal.
Appeal dismissed.
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2025 (1) TMI 334
Dishonour of Cheque - legally enforceable debt or other liability - Nature of Advance Payment - whether the cheque as given by the applicant was in discharge of a legally enforceable debt/liability or not? - Complainant i.e. opposite party no.2 has not disclosed the lawyer and client relationship between him and the applicant - HELD THAT:- It is clear that for commission of an offence under Section 138 N.I. Act, the cheque that is dishonoured must represent a legally enforceable debt not only on the day when it was drawn but also on the date of its maturity/presentation. If the cheque presented for collection of total value of the cheque without endorsing the part payment made by the drawer is dishonoured no offence under Section 138 N.I. Act would be attracted, as being held in the case of DASHRATHBHAI TRIKAMBHAI PATEL VERSUS HITESH MAHENDRABHAI PATEL & ANR. [2022 (10) TMI 424 - SUPREME COURT].
In the present case, the opposite party no.2 has mentioned that he had given Rs.12,25,000/- in cash to the applicant for purposes of purchasing property. Although, in the complaint as well as notice, the complainant has spoken about returning of Rs.11,00,000/- by giving a cheque in this regard but there is no whisper about Rs.1,25,000/-. In case it is taken that Rs.1,25,000/- has already been paid, therefore, as part payment was already made, the complaint under Section 138 N.I. Act could not have been entertained - Be that as it may, once the complainant i.e. opposite party no.2 has not disclosed the lawyer and client relationship between him and the applicant and as for the first time admitted the aforesaid fact in his counter affidavit, the story in the complaint of giving advance in cash without disclosing as to how and from where such an arrangement was made also gives benefit to the applicant who under such relationship as admitted by the opposite party no.2 in his counter affidavit has mentioned about an agreement which cannot be disbelieved by this Court.
As per the provision of Section 202 Cr.P.C. as amended with effect from 23.6.2006, the requirement is that in those cases where the accused is residing at a place beyond the area in which the concerned Magistrate exercises his jurisdiction, it is mandatory on the part of Magistrate to conduct an enquiry or investigation before issuing the process. That means, in case, if such an enquiry is not conducted in cases where the accused resides at a place beyond the area in which the Magistrate exercises his jurisdiction, the purpose of amendment in Section 202 Cr.P.C. would frustrate.
Further the Apex Court in BHARAT BARREL & DRUM MANUFACTURING COMPANY VERSUS AMIN CHAND PAYRELAL [1999 (2) TMI 627 - SUPREME COURT], had considered Section 118(a) of the Act and held that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable and defendant can prove the non-existence of a consideration by raising a probable defence.
The present case appears to be a case of malicious prosecution wherein the opposite party no.2 has concealed the real fact of lawyer-client relationship and has wrongly disclosed about Dilip Kumar Singh who is related to the applicant being Manager of the Institution where opposite party no.2 was working at the relevant point of time to which the Court cannot close its eyes as at the instance of relative of the applicant, the present complaint has been filed concealing the real relationship of lawyer & client.
It is also relevant to point out the fact that scope and ambit of Section 482 Cr.P.C. is a very agitated and debatable issue. Nevertheless, there are some cases which have got wide acceptance in the legal fraternity and hence, are used as the minor guidelines/principles governing the cases of quashing criminal proceedings.
Conclusion - In the facts of the present case, where it has been established that opposite party no.2 has not approached the Court with clean hand, noticing his conduct as is clear from the records, this Court finds it to be a fit case for exercising powers under Section 482 Cr.P.C. Keeping in mind that criminal prosecution is a serious matter, it effects the liberty of a person, no greater damage can be done to the reputation of a person than dragging him in a criminal case, continuance of prosecution would be nothing but an abuse of the process of law and will be a mental trauma to the applicants, it becomes necessary for this Court to invoke inherent powers under Section 482 Cr.P.C. in present facts and circumstances of his case.
This Court finds a good ground for quashing the impugned summoning order as well as entire proceedings - The present application under Section 482 Cr.P.C. is, accordingly, allowed.
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2025 (1) TMI 333
Challenge to orders imposing penalty, appellate orders, as also the Marketing Discipline Guidelines, 2018 (MDG) under which the penalty is imposed - non-attendance of a leakage complaint - HELD THAT:- So as to demand GST, it is to be proved that there is “supply of goods/services” by the person collecting the tax to the person from whom the tax is sought to be recovered. In the case at hand, it is the respondent Corporation who is claiming that there is “supply” of services to the petitioners herein. However, a perusal of the documents would show that no “supply of service” is effected by the respondent Corporation to the petitioners herein while imposing penalty by the impugned orders. Unless and until there is any such supply of goods/services, the question of demanding GST does not arise at all.
There is no dispute that there is no such agreement between the petitioners and the respondent Corporation. There is no case for the respondent Corporation that the petitioners and the respondent Corporation have entered into such an agreement/contract for a “consideration”. Such an agreement cannot be presumed to exist between the parties also. Here, the amounts sought to be collected from the petitioners towards penalty are not towards tolerating an act/situation. Instead, the amounts sought to be recovered are for not following the terms of the agreement/MDG framed by the respondent corporation. In fact, the amounts are sought to be recovered as a deterrent against future breach of contract between the petitioners and the respondent Corporation. The amounts sought to be recovered are under no stretch of imagination being collected towards tolerating the violation of the terms of the MDG.
The respondents are not entitled to collect GST from the petitioners herein.
Conclusion - Unless and until there is any such supply of goods/services, the question of demanding GST does not arise at all.
Petition dismissed.
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2025 (1) TMI 332
Addition u/s 68 - Assessee argument entries cannot be said to be the income for the previous year as it was wrongfully entered and reversed immediately on the next day - as decided by HC [2024 (5) TMI 1503 - PUNJAB & HARYANA HIGH COURT] assessees may make fictitious entries and return the same on the next day for taking tax benefits. There may be cases where the entries in the books of accounts may not be reflected in the bank account as the entries may be made in cash or in cheque which may not be ultimately encashed.
Also actual income of the assessee which accrues to him during the financial year, if there is an entry of any amount in the books of accounts as on 31st March, the same would be included as income of the assessee, even if he/ she may not have encashed the cheque on that day
HELD THAT:- Having heard the learned Senior counsel appearing for the petitioner and having gone through the materials on record, we see no good reason to interfere with the impugned order passed by the High Court.
Special Leave Petition is, accordingly, dismissed.
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2025 (1) TMI 331
Maintainability of appeal on low tax effect - Delay filling SLP - As decided by HC [2024 (1) TMI 1415 - PUNJAB & HARYANA HIGH COURT] appeal is not maintainable keeping in view Circular No.3 of 2018 dated 11.07.2018 of the Central Board of Direct Taxes since the tax effect is below the limit - HELD THAT:- There is a gross delay of 164 days in filing the Special Leave Petition which has not been satisfactorily explained by the petitioner.
Even otherwise, we see no reason to interfere with the impugned order passed by the High Court of Punjab and Haryana at Chandigarh. Special Leave Petition is, accordingly, dismissed on the ground of delay as well as on merits.
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2025 (1) TMI 330
Addition u/s 69A - addition of amount returned by the assessee as an agricultural income - HELD THAT:- The Inspector of Income Tax deputed by AO for spot enquiry has reported after visiting the land that the same has been marked into plots and is not used for cultivation. The material collected by AO during the course of the enquiry was forwarded to the assessee and his comments were sought for. However, the assessee did not offer any explanation.
CIT(A) has taken into account the letters issued by Executive Officer, Hayathnagar Mandal, Ranga Reddy District and Deputy Collector and Mandal Revenue Officer, Hayathnagar Mandal, Ranga Reddy District respectively, in which it is stated that no crops were grown on the land and the same was shown as plots in the land revenue records. The Income Tax Appellate Tribunal has also found that the assessee has failed to establish that the land in question was under cultivation.
Thus, the authorities under the Act, on the basis of meticulous appreciation of evidence on record have found that the land in question was already plotted and no agricultural operations were carried out by the assessee. Therefore, the claim of agricultural income is not tenable.
It is well settled in law that this Court in exercise of powers u/s 260A of the Act cannot interfere with the finding of fact until and unless the same is demonstrated to be perverse. (see Syeda Rahimunnisa vs. Malan Bi by LRs [2016 (10) TMI 1233 - SUPREME COURT] and Softbrands India Private Limited [2018 (6) TMI 1327 - KARNATAKA HIGH COURT] - Decided against assessee.
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2025 (1) TMI 329
Attachment of Property by the Income Tax Department - Seeking release of property attached by the Income Tax Department for the tax dues of the previous owner/ 2nd respondent - property was purchased by the petitioners in a court auction - HELD THAT:- As per proviso to Section 281 it is evident that, if the transfer is made for an adequate consideration and without notice of the pendency of the proceedings by the Income Tax Department or without notice of such tax due from the assessee, the transfer cannot be deemed to be void.
There is nothing to indicate that the proceedings initiated by the Income Tax Department was known to the petitioners-the purchasers in the court auction. It is also relevant to mention at this juncture that, pursuant to the auction held on 14.01.2009, petitioners had deposited an amount far in excess of the decree amount. They had to deposit Rs. 59,000/- over and above the decree amount with the court to be appropriated to the judgment debtor.
Thus, it is evident that the petitioners had purchased the property in the court auction for adequate consideration and that too, without notice of the pendency of the proceedings initiated by the Income Tax Department. Since, the purchase of the property in a court auction was a bona fide transaction as evident from the sequence of events mentioned above, it is explicit that the proviso to Section 281 (1) will apply in respect of the property purchased by the petitioners.
The attachment effected by the Income Tax Department is in respect of 51 cents of property, while the petitioners had purchased only 6 cents out of the said extent. It is submitted across the Bar that a multi-storied building is even existing on the remaining extent of property and therefore, no prejudice would befall the Income Tax Department, if they proceed against the remaining extent.
In the decision in S. Mathews v. The Secretary Ambalappuzha North Grama Panchayath and others [2022 (7) TMI 1565 - KERALA HIGH COURT] had, in a similar situation, observed that, in the facts of the said case, since the sale was without notice of the proceedings initiated by the Income Tax Department, the benefit of proviso to Section 281 of the Income Tax Act, 1961 ought to be accorded to the petitioner therein.
Thus, claim petition put forth by the petitioners ought to have been allowed and the Income Tax Department could not have proceeded against the bona fide purchaser of the property covered by Ext. P2 sale certificate issued in favour of the petitioners.
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2025 (1) TMI 328
Revision u/s 263 - scope of inquiry u/s 263 - no verification done by the AO during the assessment proceedings relating to the explanation to be forwarded by the assessee - audit party Opinion -HELD THAT:- Sine-qua non for interference by the CIT u/s 263 of the Act to the assessment order passed by the AO is of satisfaction of certain conditions as noticed above i.e. that the order passed by AO is erroneous and secondly that the order results in prejudice to the revenue.
In the present case, it is an admitted position that after the assessment order was passed, audit objections were raised with regard to inquiry said to have been conducted by the AO and the audit - party recorded several major audit objections with respect to the investment made by the assessee in mutual funds/shares. There was no verification done by the AO during the assessment proceedings relating to the explanation to be forwarded by the assessee.
We, therefore, are satisfied that the order passed by the CIT un/s 263 of the Act in the facts and circumstances of the case cannot be said to be such which was to be interfered with by the ITAT. The view taken by the ITAT based on the judgment passed in B & A Plantation and Industries Ltd. and another.[2006 (12) TMI 101 - GAUHATI HIGH COURT] cannot be said to be correct interpretation of Section 263 of the Act and the record relating to any proceedings under the Act available at the time of examination by the Commissioner would also include the audit objections.
In CIT vs. P.V.S. Beedies Pvt. Ltd. [1997 (10) TMI 5 - SUPREME COURT] held that there can be no dispute that the audit party is entitled to point out a factual error or omission in the assessment. Reopening of the case on the basis of a factual error pointed out by the audit party is permissible under law. Decided in favour of revenue.
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9911796707
